Appointment and Remuneration of Liquidator under IBC [ Section 34 ] - Insolvency Resolution And Liquidation For Corporate Persons - IBC

Appointment and Remuneration of Liquidator under IBC [ Section 34 ] Resolution professional to act as liquidator [ Section 34(1) ] Where the Adjudicating Authority passes an order for liquidation of the corporate debtor under section 33 , the resolution professional appointed for the corporate insolvency resolution process under Chapter II or for the pre-packaged insolvency resolution process under Chapter III-A shall, subject to submission of a written consent by the resolution professional to the Adjudicatory Authority in specified form, act as the liquidator for the purposes of liquidation unless replaced by the Adjudicating Authority under section 34(4) . Eligibility for appointment as liquidator Regulation 3 of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 . Powers of BoD/ KMP vested in liquidator [ Section 34(2) ] On the appointment of a liquidator under this section, all powers of the board of directors, key managerial personnel and the partners of the corporate debtor, as the case may be, shall cease to have effect and shall be vested in the liquidator. Personnel to extend cooperation to liquidator [ Section 34(3) ] The personnel of the corporate debtor shall extend all assistance and cooperation to the liquidator as may be required by him in managing the affairs of the corporate debtor and provisions of section 19 shall apply in relation to voluntary liquidation process as they apply in relation to liquidation process with the substitution of references to the liquidator for references to the interim resolution professional. Order to replace the resolution professional [ Section 34(4) ] The Adjudicating Authority shall by order replace the resolution professional, if- (a) the resolution plan submitted by the resolution professional under section 30 was rejected for failure to meet the requirements mentioned in section 30(2) ; or (b) the Board recommends the replacement of a resolution professional to the Adjudicating Authority for reasons to be recorded in writing; or. (c) the resolution professional fails to submit written consent under section 34(1) . AA to direct the IBBI to propose name of another IP [ Section 34(5) ] For the purposes of clauses (a) and (c) of section 34(4) , the Adjudicating Authority may direct the Board to propose the name of another insolvency professional to be appointed as a liquidator. IBBI to propose the name of another IP [ Section 34(6) ] The Board shall propose the name of another insolvency professional along with written consent from the insolvency professional in the specified form, within ten days of the direction issued by the Adjudicating Authority under section 34(5) . Adjudicating Authority to appoint insolvency professional as the liquidator [ Section 34(7) ] The Adjudicating Authority shall, on receipt of the proposal of the Board for the appointment of an insolvency professional as liquidator, by an order appoint such insolvency professional as the liquidator. Charge of fees for conduct of liquidation proceedings [ Section 34(8) ] An insolvency professional proposed to be appointed as a liquidator shall charge such fee for the conduct of the liquidation proceedings and in such proportion to the value of the liquidation estate assets, as may be specified by the Board. Payment of fees [ Section 34(9) ] The fees for the conduct of the liquidation proceedings under section 34(8) shall be paid to the liquidator from the proceeds of the liquidation estate under section 53 . Remuneration of Liquidators Regulation 4 of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 . Relevant Case Laws Sandeep Kumar Gupta Vs. Stewarts Lloyds of India Ltd. Anr. - NCLAT Dated 28.02.2018 AA was well within its jurisdiction to engage another person as RP or Liquidator as the performance of the previous RP was unsatisfactory. Vijay Kumar Singh Vs. Anil Kumar Ors. - NCLAT Dated 09.11.2020 Interest of FCs as well as other creditors will remain even during liquidation proceedings. Accordingly, AA should have considered appointing any other IP as liquidator when it was evident that the CIRP has not been conducted in a way desired, before passing the liquidation order.